Leaving is liberation

UK business opinion moves towards exit

by John Longworth in London

Sat 11 Jun 2016

No wonder support for Britain's European Union membership among small and medium-sized businesses is crumbling. Opinion is moving in favour of Leave among business owners no longer cowed by self-serving multinationals and big business lobby groups like the Confederation of British Industry.

A survey by my old employer, the British Chambers of Commerce, in May showed a 7 percentage point increase in the number of businesspeople supporting Leave – to 37% – compared with a previous survey in February. Of the firms trading only in the UK, a majority now favour leaving, as do those who export only outside Europe. Roughly 95% of UK businesses fall into one of these two categories.

It is fantasy to suggest the UK can change the EU system from the inside. Britain’s vaunted ‘influence’ in Brussels has failed for decades. If it votes to stay, its bargaining power will be spent.

Britain will be liberated and will thrive outside the EU. It will be able to design sensible regulations that suit its economy and for which the British people can hold their elected representatives to account. Businesses will benefit from less red tape and from the UK’s enhanced control over its borders. It will be easier to manage current chaotic immigration from Europe and welcome skilled people from the rest of the world.

Europe will want to continue trading with the UK. Britain’s deficit with the Union is at record levels – £68bn last year and £24bn for the first quarter of this year alone. Businesses in France, Germany and the Netherlands will not allow the eurocrats to shut the door on their best customer.

Bearing in mind the average external tariff for goods in the single market is just over 3% – a rounding error in a currency movement – the UK will not relinquish any of the competitive advantage it will gain by leaving a trade arrangement of marginal benefit.

Britain will be in a wonderful position to reach trade deals with other countries like the US, Australia and India, rather than have to depend on the sluggish Brussels machine, which has to cobble together a lowest common-denominator negotiating position among 28 countries. Others have reached trade deals with the largest economies in the world in rapid time – less than 24 months.

The UK will be free of the risk posed by an avalanche of regulation from Brussels as the euro area consolidates. The uncertainty created by an unstable euro would be the greatest brake on growth if the UK remains in the EU.

The UK doesn’t want to be dragged along with extra costs and regulations as Germany seeks to prevent the euro area from falling apart at any cost.

If British businesses want a successful global future, they will be better off if Britain leaves the EU.

John Longworth is Chairman of the Vote Leave Business Council. This is No.89 in the series – the 100th article will appear on 23 June.

OMFIF’s series on the UK EU referendum presents a wide variety of perspectives from Britain and around the world ahead of the 23 June poll. We are assuring a balance between many different points of view, in line with OMFIF’s overall neutral stance on the issue.